Which EV charging stocks are the best bets? An analyst suggests 2 names to consider

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The Biden administration is going all out to promote electric vehicles (EVs). From a $7.5 billion provision in the ‘Build Back Better’ bill to political pressure on automakers to commit to ramping up production in a bid to convert 40% of sales from cars to electric vehicles by the end of this decade, it’s clear that under Biden, the government has the will to force major change in the auto industry.

The Biden administration has also prioritized the production of battery systems for electric vehicles, to the tune of $3.1 billion in federal funding for battery makers. With this support in place, investors could find plenty of opportunities in electric vehicle charging stocks.

Against this backdrop, one analyst, Christopher Souther of B. Riley Securities, picked 2 stocks in the load segment with the potential for solid gains going forward – gains in the 50% range or more. We scoured both via the TipRanks database to see what other Wall Street analysts have to say about them.

Tritium DCFC Limited (DCFC)

Tritium is an Australian company that has been in the electric charger business since 2001. The company focuses on DC (direct current) fast chargers, manufacturing both the software and hardware for these advanced electric vehicle charging systems. The company has more than 6,700 chargers in service in more than 41 countries. Tritium’s fast chargers are designed to meet a major need in the electric vehicle segment by reducing charging times; DC fast charger technology can bring most consumer electric vehicles to an 80% state of charge in less than 45 minutes.

Tritium recently announced steps to expand its product footprint. In April this year, the company entered into a multi-year contract with energy giant BP, to provide chargers and support services for BP’s electric vehicle charging network. The initial order under this contract includes just under 1,000 charging stations in the UK, Australian and New Zealand markets.

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In May this year, Tritium went on to announce that it had committed to supply 250 chargers to the UK network Osprey, a growing player in the UK EV fast charging sector. The tritium contribution should increase the Osprey network by more than 50%.

These moves bode well for Tritium, which entered the public markets through a SPAC merger in January this year. Since its IPO, however, the stock has fallen 42%.

In Souther’s comments on Tritium, he writes that he thinks this company has a head start in the DC fast charging market segment, given its status as a pure player in the field.

“We believe Tritium is well positioned with key customers across utility, fleet, utility and heavy/industrial vehicles, providing strong revenue growth visibility. New customer wins were driven by Tritium’s differentiating factors, including its low cost of ownership, liquid cooling technology and new Modular Scalable Charging (MSC) platform,” said Souther.

“As Tritium’s installed fleet grows, we believe recurring software and services revenues are likely to evolve to become significantly margin accretive. “, added the analyst.

Along with this bullish outlook, the analyst is setting a buy rating on Tritium shares and a price target of $12 that indicates confidence in an 89% upside for the next 12 months. (To see Souther’s track record, Click here)

It’s not often that analysts all agree on a stock, so when it does, take note. Tritium’s Strong Buy Consensus Rating is based on a unanimous consensus of 5 buys. Tritium shares are priced at $6.34 and their average price target of $14.40 implies approximately 127% upside potential. (See tritium inventory forecast on TipRanks)

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Global beam (BEEM)

Beam Global, the second EV charging stock we review, offers a range of power products for use in a variety of battery charging and storage niches. The company’s most prominent product is the EV ARC, or stand-alone renewable charger, a stand-alone EV charger that operates “off-grid”, using built-in solar panels to provide power.

The EV ARC comes with several important selling points. It’s designed for easy deployment, can fit in or around standard parking spaces, and can meet the charging needs of most electric vehicle models. An ARC EV system can reach 6 vehicles at a time and can deliver up to 265 e-miles of power per day. Deployment can be done without construction work, while the “off-grid” function allows greater flexibility of implementation.

Earlier this month, Beam announced that the second quarter of this year so far has seen both an increase in repeat orders and an increase in multi-unit orders for the EV ARC system.

These continued gains come after a record first quarter for the company, in which Beam posted total revenue of $3.8 million. This is a 175% increase over the prior year quarter, and was driven by a 250% increase in system shipments during 1Q21. Beam, which typically posts a quarterly net loss, reported cash of $19.2 million at the end of 1Q22.

B. Riley’s Souther describes this company’s unique flexible approach to electric vehicle charging as the key differentiator here, writing: “While we expect the vast majority of electric vehicle charging infrastructure is connected to the network, we also expect Beam to benefit from the faster deployment. times of its off-grid solutions as municipalities, fleets and other players seek to scale faster than red tape or grid availability typically allows. »

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“Additionally, in areas where resilience is a key factor, such as on military bases and for local first responders and municipalities for disaster preparedness, we view Beam as having a unique competitive advantage over ground-connected solutions. The ability to recharge via renewable energy sources and provide off-grid alternatives is central to the company’s approach, but products can also be integrated into the local grid in scenarios where this is beneficial,” said Souther continued.

To that end, Souther has assigned a buy rating to Beam shares, and his price target of $23 implies about a 52% upside this year.

This isn’t the only bullish review for Beam, although the company’s 6 recent analyst reviews have an even split between buys and books, making the consensus rating a Moderate Buy. BEEM shares have an average target of $29.50 and a current price of $15.09, suggesting around 95% upside going forward. (See BEAM stock forecast on TipRanks)

To find great ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.

Disclaimer: Opinions expressed in this article are solely those of the featured analyst. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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